What’s a fair pension for public employees?

Voters in San Jose, San Diego and the state of Wisconsin made it clear Tuesday that they consider public employee pension costs at the top of the list of needed government reforms. But what would those reforms look like?

Government employees — whether for the federal, state or local government — typically have earned less in salary than private sector employees because the public sector jobs were considered more stable. The trade-off, it was thought, was higher risk of losing a job (through financial downturn, industry chnages or layoffs) in the private sector, the higher the reward. That thinking may no longer hold true.

So by what measure should a government pension be deemed fair to the employee and the taxpayer? If we want pension reform, what should it seek to achieve?